This week - the start of Fairtrade fortnight - the Adam Smith Institute published a report claiming that Fairtrade does more harm than good. Fairtrade have hit back in a press release. What do you think?
Fairtrade as the perfect name. And I like them - and I consume their products. But I have a few issues with them. They are not as perfect as their name implies. For instance, they do not work with the poorest of the poor, but only those organized in cooperatives. And farmers do not get the Fairtrade price, only a part of it and the rest goes to the cooperative. Don’t forget, farmers pay Fairtrade to be certified. More on my blog. But the quicker they come clean, the quicker we can address their reason for existence – making the world a better place. More on My Beef with Fairtrade at http://angryafrican.wordpress.com/2008/02/21/my-beef-with-fairtrade/
This is a good discussion topic. The members of the organization I work for, Engineers Without Borders Canada, have recently been having a discussion on this spurred by the same Adam Smith Institute report. If you're interested the link below has a few opinions and sources on fair trade.
I am minded to agree from the point of view that it is not always as fair as it appears, especially if child labour is used to pick cocoa and those children do not attend school and worse have never tasted the end product of their labour (chocolate). In addition why is it that handicrafts are excluded and yet almost alwyas these are produced by women, is that fair?
It is also far much better to export a finished product, e.g that the coffee/cocoa, is turned into a finished product prior toe xport to maximise income for the country in question. I quite like the idea of Equitable trade instead, increase the value by exporting a finished product for maximum profit
Although I have some concerns about aspects of Fairtrade (as opposed to fair trade - an important distinction as Fairtrade is only one way of looking at fair trade and is quite narrowly defined), I believe that the Adam Smith Institue article is poorly argued. I have written a response to it which is attached as a file.
I agree with much of the report except it is a little extreme in its outright recommendation on free trade. The fact is that the biggest hindrace to enhanced trade between the developing countries and the developed markets is one of unfair trade practices and agricultural subsidies. Most of the African countries for example already have very low tariffs for imports of food products and have liberalised their markets substantially and have cut off support to small farmers who are the majority. The biggest winners in this so called fairtrade are the retailers and the European commercial farmers based in Africa that sub contract African small famers at very poor terms.
Come to Zambia and see how many of the exporters of fresh flowers and vegetables are actually indigenous Zambian farmers. Over 80% of them are European controlled farms with outgrowers schemes that leave most farmers subject to the whims of these big farmers. The other major weakness for small and emergent farmers is the lacl of information on the prices their produce obtains in the retail market in the Uk. A simple example will tell you the problem. A sweet potato in Zambia can be bought at a price as low as 10 pence but if you go into Sainsbury you will find this selling at over 2 pounds sterling.
Who is getting the bulk of the profit? if we want to impact poverty in Africa and the rest of the world Europe, USA and Japan must open up their markets to free trade under fair and transparent rules. then we in the developing world must deal with the key supply side constraints like transport infrastructure, agricultural food storage, technology, cost of electricity, access and cost of finance etc. Relying on donor aid and schemes like fairtrade will take us no where.
No doubt, there are lots of things to improve with Fair Trade... I mean, with Trade!
But I'm truly convinced that if there is ONE SINGLE WAY to make it better (following transparently the hole production chain, for example), that will come through networks like this one.
If you can read a bit of french, maybe you can find some extended information & interesting comments (nº6, 8...) about "Fair Tourism" on my blog
If french is not your cup of tea, you can also find lots of things in english on that page ;)